Sackers comments on expanding the availability of CDC schemes

Commenting on the Government’s publication of several documents aimed at expanding CDC schemes, Andrew Worthington, partner said:

“After the false start of there being no CDC announcement during the Pensions UK conference last week, the publication of a raft of CDC-related documents this week was very welcome. Although in the works for some time, the developments felt like a seminal moment, signifying the major expansion of CDC and exciting times for the pensions industry and savers ahead.

Whilst the advent of a “third way” in pensions is coming closer, there is a lot of detail to work through and the changes will not happen overnight. The legislation governing whole-life unconnected multiple employer CDC schemes is expected to come into force next July and at-retirement CDC will be further ahead. This will give those looking to offer CDC time to prepare, which may well be needed given that there will be a new authorisation regime to navigate, which authorised master trusts looking to offer CDC will need to do in addition to their existing authorisation.

The introduction of at-retirement CDC will hopefully provide food for thought for those who have been scratching their heads over the default pension benefit solution proposed under the Pension Schemes Bill.”

Read our alert: Expanding the availability of CDC schemes.